By The Suzuki Alto, widely regarded as one of Pakistan’s most popular compact cars, experienced a sharp decline in sales last month. According to the latest figures released by the Pakistan Automotive Manufacturers Association (PAMA), sales fell by nearly 75%, dropping from 9,497 units in June to just 2,327 units in July.
Impact of New Taxes on the Auto Sector
The sales decline comes in the wake of recent government taxation changes affecting the automobile industry. The General Sales Tax (GST) on vehicles up to 850cc—previously at 12.5%—was increased to 18%. Additionally, a new NEV levy was introduced, applying:
- 1% on vehicles up to 1300cc
- 2% on vehicles between 1301cc–1800cc
- 3% on vehicles above 1800cc
Although the Suzuki Alto falls under the 850cc category, the higher GST rate significantly increased its market price.
Price Hike Pushes Alto Beyond Buyers’ Reach
Following these fiscal adjustments, Pakistan Suzuki Motor Company (PSMC) raised the Alto’s price to Rs. 3,326,450. This price hike has placed the car beyond the reach of many budget-conscious consumers, particularly first-time car buyers, who have traditionally formed the bulk of Alto’s customer base.
Early Invoicing Strategy Inflated June Sales
In an effort to shield customers from the sudden tax increase, PSMC had resorted to early invoicing in June, processing advance orders for July and August. While this temporarily boosted June sales figures, it created an inevitable slump in subsequent months, leading to July’s record decline.
Future Outlook for Suzuki Alto
Industry experts suggest that unless tax relief measures are introduced, demand for the Suzuki Alto will remain under pressure. The affordability gap created by higher taxes and increased prices may push buyers toward used vehicles or smaller alternatives, reshaping market dynamics in Pakistan’s compact car segment.
